But it’s NOT my debt!

You get a call from a collection company trying to collect on a debt that is not yours. You tell them it is not your debt but they keep calling. What do you do?

I get this question a lot. In fact, recently I was asked this very question in “Ask Dr. Debt”. My advice follows:

I would recommend that you send a letter to the collection company stating that this is not your debt and requesting that they send you something to the contrary if they believe it is your debt and state that you consider any contact in the meantime to be harassment and will report them accordingly if they do not take the necessary steps to ensure they are contacting the correct person.

In addition, I would suggest you verify that this debt is not being reported on your credit reports. In Canada you would contact both Equifax and TransUnion.

If that does not resolve the issue, I would consider having a lawyer send them a letter requesting that they stop contacting you. This, unfortunately, is a more costly approach, but seems to get the job done.

There is a scenario that comes up even more often than this one. You have a debt that is yours but you paid it off, you now find yourself getting calls stating that you still owe the money. What do you do?

The easiest solution is to produce evidence that you paid off the debt. This, of course, is assuming that you have a copy of the statement showing your final payment. Unfortunately this happens very seldom. Which leads me to my first piece of advice:

ALWAYS keep a copy of your final statement showing that something is paid off. For a VERY long time. Years! Maybe forever. Ok, maybe not forever but I have seen debts pop up 5+ years in the future.

Next I suggest you do much of the same as in the previous scenario:

Request verification of the debt, in writing.

Contact the original source of the debt (lender, credit card company) and confirm what they have on their records.

If you cannot prove that you paid off the debt, I am afraid you are left with one of three options:

Suck it up and pay it off to make it go away. I do recommend if you are considering this option that you work out some type of debt-settlement with the collection company.

Live with the debt showing as a bad debt. Not a great option if you rely on having good credit to get you through life. I would suggest that you put a comment/alert on your credit report to say that you dispute the debt and that is why it is not being paid. Be prepared to explain this in any credit transaction you do in the future.

Consider declaring bankruptcy to be released from the debt. Not a light decision and possibly not beneficial if you own anything of any value or have debt that you do not want to compromise.

There is, in theory, another solution, and that is to contact Consumer Affairs in your province to ask for assistance in resolving it. I have heard this option exists but am wondering if it is a myth as I have never heard of a success story utilizing it. If you have had success, perhaps you will be the first success story I can share.

I would love to hear bout your successes and challenges with this type of scenario so we can all learn from each other!